Gorilla Legislative Network Newsletter

In a continuing sign of good news for the state economy, tax receipts were $40 million, or 10.3%, above estimates for the month of March. Late last week government officials and economists provided lawmakers with their view of the strength of the economy. Their financial forecasts call for a boost in state revenue for the remainder of the fiscal year with an estimated increase of about 2 percent over November’s prediction. The increase in revenue for March, as well as increasing confidence in state’s fiscal health for FY13, will likely impact negotiations when the legislature returns at the end of this month.

Heading into the last day before the legislative “Spring Break,” it appeared a deal had been struck between House and Senate conferees, and that a conference report bill would be adopted by the House.  The agreement would have left only a handful of items to be resolved in the Omnibus bill when legislators returned at the end of April. Less than 24 hours after an agreement had seemingly been reached, a dispute arose at 3 p.m. on the final day before the break. The dispute centered on the funding source (SGF or transportation funds) for a $24 million K-12 appropriation. The House and Senate could not resolve the dispute, and a Mega bill was not passed, pushing all budget items to Omnibus. 

The outlook for funding of a new degree program in Polymer Chemistry remains positive despite the breakdown of the budget process.  The $500,000 first year phase-in funding for the program was not only included in the Governor’s budget recommendation, but also in the budget bills that passed both the House and the Senate.

The funding was also included in the agreement reached in the Conference Committee, before the conference report lost support of the House due to an unrelated conflict.  While funding is not assured, PSU remains in a strong position.

Unfortunately, the outlook isn't as clear when it comes to funding the university's other priorities. We do not expect to see any increase in the general base fund which will place additional pressure on the university as it works to address salary concerns and manager increasing utility and health insurance costs.

On a slightly more positive note, there is still a possibility that lawmakers will reinstate funding for the undermarket pay adjustment plan for classified employees, along with SGF funding for the longevity bonuses. Both proposals were included in the Senate budget bill but failed, by just four votes (55-61), to make it through the House.

After more than five hours of debate, a comprehensive tax bill passed the House on March 14^th by a vote of 68-56 (HB Sub for SB177). The bill would reduce individual income tax rates and eliminate taxes on some businesses. It would also retain several popular tax credits and deductions, including the mortgage interest credit and modified the earned income credit.

An effort to “borrow” from the transportation project budget to help fund the tax cuts was defeated. Other notable provisions of the bill included a 3% cap on the growth of state government and an amendment eliminating sales tax on food. 

The elimination of sales tax on food sales would result in a loss of more than $300 million each year in state revenue.

The Senate, which favors a plan similar to the Governor’s plan, did not concur with the House bill and requested a conference committee.  As of first adjournment no agreement had been reached. While some sort of modest tax reform is likely, we do not expect sweeping changes to the tax code during this session.

Beginning with the KPERS Study Commission report, numerous proposals for reforming KPERS have been introduced and “floated” this session but some consensus seems to have developed around SB259.

The conversation began this session with the KPERS Study Commission central proposal to transition from a defined-benefit model to a defined contribution model. This initial proposal had a very luke-warm reception.

As amended by the House, SB259 would create a new “cash balance” system. Under this plan, employees would be required to contribute 6% of their salaries in a retirement plan with a gradually increasing state match of 4% (1% match in the first year and increasing 1% each subsequent year up to 4%). Employees would then be guaranteed a 5% rate of return based on the cash balance of their account at retirement.

In addition to the cash balance plan, this bill creates a defined contribution option. New employees hired after January 1, 2014 would have a choice between the cash balance plan or the defined contribution plan.  The current KPERS plan would not be an option for anyone hired on or after January 1, 2014. 

Current employees would not be affected by these changes. The House passed H Sub for SB 259 on a vote of 92-33. The bill is now being considered in conference committee.

• No SGF for remedial courses and narrowing of QA exception (HB 2745): This bill would prohibit the use of state general fund dollars for remedial courses and reduce the qualified admissions exception window from 10% to 5%.  While PSU offers almost no remedial courses, narrowing the qualified admissions window would have the effect of reducing access to prospective students. Under current law the exception window is scheduled to increase to 15% further compounding the impact this law would have on access to higher education. The bill passed the House 68-55 and is awaiting action by the Senate.
• Concealed carry in public buildings (HB 2353): This bill would allow concealed carry license holders to carry concealed weapons in public buildings.  As originally drafted the bill would have allowed concealed guns on college and university campuses. Through a strong and unified effort of Regents institutions and community colleges, along with our many supporters, we were able to secure an amendment “exempting” college and university campuses.  While the amendment is not a blanket exemption it allows for the governing boards of the institutions (in our case the Kansas Board of Regents) to decide if concealed weapons will be allowed on their campuses.  The amendment was widely supported in the House and passed on a vote of 92-33. The amended bill passed on a vote of 70-54.  The Senate has yet to vote on the measure and has not shown much interest in taking it up this session.
• Post-secondary education deferred maintenance tax credit (SB267): Currently, colleges and universities in Kansas have access to tax credits, which they may “sell” in order to raise funds for deferred maintenance. These deferred maintenance tax credits have been a good source of revenue for state postsecondary education institutions to finance deferred maintenance projects. This bill would extend these credits.  The bill passed Senate 39-1.  Is currently in the House Taxation committee.  Outlook of the bill is uncertain.
• Educational license plate streaming (Sub for HB2431): This bill will streamline the educational license plate program making it easier for alumni and supporters to acquire and renew their Gorilla license plates. If passed by the Senate, plates may be acquired or renewed at the county offices without the need for an additional trip to the university.  Donations to the university will be processed by the county office and sent to the university. The bill passed House 122-0 and is currently in the Senate Transportation committee. The outlook for passage is positive.
• Child abuse mandatory reporting (HB2533): Under this bill, state employees in positions of authority will have a legal obligation to report any known child abuse. The original scope of this bill was so broad that the mandatory reporting requirement would have extended beyond the borders of the University and official University activities. Along with other KBOR institutions PSU advocated for an amendment narrowing the scope of the reporting requirement to activities on campus or at official University events off campus.  The amended bill passed the House by a vote of 123-1 and now awaits Senate action. 
• Repeal of in-state tuition for undocumented students (HB2522 ): This bill would have repealed current provisions that allow in-state tuition for undocumented students if they have attended a Kansas high school for at least three years and have earned a diploma or equivalent. The bill, which we strongly opposed, will not be considered this session.

Reapportionment of the 125 House, 40 Senate and 4 congressional districts is the most important debate to watch now that the legislature has reconvened.The reconfiguration of the Kansas political maps will be implicitly present in every other debate the legislature has in the final weeks of the session.

The House remap went quickly early in the session, aided by the retirement of several members in key areas of the state, chiefly southeast and western Kansas. The retirement of members in areas of declining population allowed for a map that did not pit incumbent representatives against each other in the November election.

With no announced retirements in the Senate and a coordinated statewide campaign against a handful of “moderate” republicans, several of whom are drawing challengers from the House, reapportionment of the upper chamber is much more contentious. Reapportionment of the four congressional districts has been controversial throughout the session with debate focusing primarily on whether Manhattan (including Kansas State) will be moved to the 1^st congressional district or remain in the 2^nd district. 

There is significant concern that a move to the 1^st district may endanger completion of the NBAF project at K-State.

While we are not taking a position in the redistricting fight we will continue to monitor it closely because of the central role it will play in all other outstanding debates of great concern to PSU.